Bombay High Court
Tata Communications Ltd vs Employees State Insurance Corpn on 11 July, 2018
Author: A. K. Menon
Bench: A. K. Menon
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sbw
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.5055 OF 2015
AND
WRIT PETITION NO.1139 OF 2017
Tata Communications Ltd.,
VSB, MG Road,
Fort, Mumbai-400 001
and its Corporate office at
Plot no.C-21 & 36, G-Block
Vidyanagar P.O., Bandra-Kurla
Complex, Mumbai-400 098. .. Petitioner
V/s.
Employees State Insurance Corporation,
Panchadip Bhavan,
108, N M Joshi Marg,
Lower Parel, Mumbai-400 013. .. Respondents
............
Mr. K. M. Naik, Senior Advocate, i/b. Sujeet P. Salkar for the petitioner in
WP/5055/2015.
Mr. K. M. Naik, Senior Advocate, a/w Kunal Kirpalani i/b. Mulla & Mulla & CBC
for the petitioner in WP/1139/2017.
Mr. H. V. Mehta for respondent no.1.
Ms. Vaishali Nimbalkar, AGP, for the State.
...........
CORAM : A. K. MENON, J.
RESERVED ON : 28TH MARCH, 2018.
PRONOUNCED ON : 11TH JULY, 2018.
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JUDGMENT :-
1. This common order disposes the above writ petitions in which the contesting parties are common. Considering the narrow compass within which the issues lie, by consent the petitions have been taken up for final disposal at the admission stage since all the parties are represented and have waived notice of final disposal. Rule. Returnable forthwith.
2. Before dealing with the merits of the case, it would be appropriate to briefly describe the challenge in each of these petitions. Writ Petition no.5055 of 2015,
3. The petitioner has challenged an order dated 17 th March, 2015 passed by the ESI Court at Mumbai in Application(ESI)no.4 of 2013 whereby the ESI Court dealt with two interim applications Exhibit "2" and "15" in the main Application (ESI) no.4 of 2013. Exhibit "2" sought a direction to the ESI Corporation-respondent no.1, to deposit a sum of Rs.25,55,02,537/- in Court pending disposal of Application (ESI)no.4 of 2013. Vide Exhibit 15, the petitioner sought additional ad-interim relief by way of a temporary injunction restraining the respondent no.1 from taking any steps pursuant to communications dated 6th September, 2013, 13th September, 2013 and 10th September, 2013 whereby the Regional Director and the Deputy Director of the *3* wp.5505of2015&1139of2017.odt respondent Corporation had fixed personal hearings on 15 th October, 2013 at 11.00 a.m. and 3.00 p.m. in order to grant an opportunity to the petitioner to show cause against recovery of damages, difference in contribution of diverse sums of money.
4. Exhibit 2 seeking deposit of money in Court came to be rejected and Exhibit 15 was partly allowed inasmuch as the respondent was directed not to recover damages in a sum of Rs.12,04,71,997/-. The other reliefs in regard to the proposed hearing regarding levy of Rs.3,64,42,479/-, Rs.8,01,55,437/- and Rs.3,18,95,614/- were not interfered with since the personal hearing in respect of those demands was already scheduled and was to be held as proposed. Writ Petition no.1139 of 2017
5. In this petition the challenge is to the order dated 1 st July, 2016 passed by the ESI Court rejecting "Exhibit 46" by which the petitioners sought a direction to the respondent "to re-verify relevant records of the petitioner by giving him the proper opportunity so that the correct and legal liability could be ascertained."
6. The factual background leading to the two impugned orders is as follows:-
(i) The petitioner is a company incorporated under the Companies Act, 1956. It *4* wp.5505of2015&1139of2017.odt was a government company known as Videsh Sanchar Nigam Ltd. till the petitioner took over the company. Pursuant to a process of disinvestment by the Government of India, all shares of the Government of India were transferred to the Tata Group. The petitioner was engaged in international telecommunications.
7. It is the petitioner's case that as a government company under the Department of Telecommunications, it was exempted from the provisions of the Employees State Insurance Act, 1948 ("the Act"). However, after the takeover, the petitioner was allotted an "Employers code" and is believed to have filed its returns as mandated by the Act. The petitioner has contended that it was not liable to make any contribution since its employees were drawing salaries more than the prescribed limits under the Act.
8. On 14th January, 2013, the petitioner received a show cause notice dated 14th August, 2012. They received two further communications dated 16 th January, 2013 seeking to recover the following sums:-
i) Rs. 8,20,17,293/- for the period from February 2008 to April 2010;
ii) Rs.11,39,12,907/- for the period from May 2010 to May 2012 together with an interest amounting to Rs.3,67,96,698/-and Rs.2,14,80,297/- respectively.
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9. Vide a reply dated 24th January 2013, the petitioner sought time. The petitioners received two further communications dated 17 th January, 2013 seeking to recover the contributions. Pending this request for extension of time, the Corporation demanded Rs.25,55,02,357/- on an ad hoc basis without furnishing any details as to how the amount was computed. Recovery Proceedings were also initiated for recovery of 'monthly contribution' for the period from 1st February, 2008 to 13 th April, 2010 and from 1st May, 2010 to 30th May, 2012 along with penal interest, execution charges. Prohibitory Orders dated 1st February, 2013 came to be issued to the petitioners bankers.
Thereupon the petitioners officers met with the respondents and sought to convince them that there were no defaults and that the respondent had not carried out any inspection of the records and without doing so it was not proper to issue any prohibitory orders addressed to the bankers. The petitioner inter alia contended that the show cause notices were not properly served on the petitioners since the concerned employee Mr. Ajit Patnaik who was served was no longer in their services. The petitioner received the notice only on 14 th January, 2013 and therefore no replies have been sent to the individual show cause notices. The petitioner sought an order vacating the prohibitory orders. Meanwhile respondent recovered Rs.4,62,58,739/- from the bankers. As a result, the petitioner was left with no option and pay the balance of Rs.20,94,89,280/- on or about 6th February, 2013.
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10. According to the petitioner, the issuance of prohibitory orders was an abuse of power, arbitrary and illegal. They meanwhile filed an ESI Application no.4 of 2013 under Section 75, 77, 39 and 45(A) and 45(I). The petitioner sought a declaration that the provisions of the Act do not apply to it and sought an order of permanent injunction restraining the Corporation from taking any action against the petitioner. It also sought quashing of the demand for Rs.25,55,02,357/- and sought refund of the amount recovered along with 12% interest and compensatory costs. In the meantime, they sought an order directing the Corporation to deposit a sum of Rs.25,55,02,537/- in Court. The petitioner also filed an interim application Exhibit 2 and Exhibit 15 as aforesaid.
11. Vide Exhibit 10, the petitioners sought a temporary injunction restraining the respondent from taking steps to recover any amount of interest and damages pending disposal of Application (ESI) no.4 of 2013. Exhibit 11 came to be filed by the Social Security Officer of the respondent corporation by way of an undertaking to the effect that till the inspection report is submitted by the Social Security Officer after completion of the inspection, which was to commence on 30th April, 2013, no proceedings will be adopted under Section 85B or Section 45A. On Exhibit 11 the Court passed an order in terms of the undertaking, thereby protecting the petitioner. The petitioner also filed Exhibit 13 seeking to file additional documents and a rejoinder to the written statement *7* wp.5505of2015&1139of2017.odt filed by the corporation and sought a direction to furnish a copy of the entire investigation report. Further applications came to be filed for extending the interim protection granted on 9 th April, 2013 in terms of the undertaking of the Social Security Officer. On 19 th November, 2013 the stay granted was extended by two weeks.
12. On 17th December, 2013, a further written statement came to be filed on behalf of the Corporation. The protective order continued to be in operation. On or about 1st October, 2014 the Corporation filed an application, Exhibit 33, seeking to vacate the stay order granted against proceedings with the show cause notice on the basis that the petitioner could take advantage of an Amnesty Scheme 2014 to resolve the entire controversy. A further application came to be filed by the Corporation disclosing the entire Amnesty Scheme. The petitioner sought time to consider the Amnesty Scheme and vide Exhibit 39 the petitioner contended that they had examined, in depth, the Amnesty Scheme and they decided not to avail of the same and requested the ESI Court to take up Exhibit 2 and 15 for hearing. This is how the impugned order dated 17th March, 2015 came to be passed.
13. Mr. Naik, the learned senior counsel appearing on behalf of the petitioner submitted that the petitioner had no liability towards the respondents for the relevant periods. The employees of the petitioner were *8* wp.5505of2015&1139of2017.odt drawing salaries in excess of the limits provided under Section 2(9) of the Act and till September 2011 to August 2012 these employees came to be covered under the Act and the details of these persons were filed along with returns and the liability was duly discharged.
14. Mr. Naik submitted that the Court failed to consider crucial aspects of the case and was apprised of the fact that a huge sum of Rs.25 crores was demanded and had been recovered purely on an ad-hoc basis and without a reasonable opportunity of being heard. Mr. Naik submitted that prohibitory orders came to be issued without verifying any records of the petitioner. The petitioner had employed certain contractors who had disclosed all relevant records of the payments made to these contractors who were independent and allotted separate ESI codes. Particulars of the payments had apparently been filed with the respondents. He submitted that the petitioner had complied with all concerned relevant labour laws and statutory liabilities including ESI payments wherever applicable and the amount which had been recovered was not payable. He submitted that the petitioner was entitled to an order directing the amount recovered from them to be deposited in the Court. Vide Exhibit 2, the ESI Court had incorrectly rejected the application. Similarly under Exhibit 15, Mr. Naik submitted that the petitioner was entitled to protection against recovery of sums contemplated in the show cause notices forming subject matter of prayer clauses of Exhibit 15.
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15. Relief was granted in respect of the damages sought to be recovered in a sum of Rs.12,04,71,997/- but the Corporation would then proceed to hear the other show cause notices. He submitted that the impugned order is perverse and amounted an error of law apparent on the face of the record. He submitted that the show cause notice was never served upon the company since it was addressed to Mr. Patnaik who had resigned and left the services of the company.
16. Mr. Naik submitted that the prohibitory order passed under Section 45G was also not justifiable. He further assailed the order passed under Section 45A and submitted that there was no occasion to pass such an order. In the course of disposing of the petitioner's applications the Court had concluded that verification of records could not be completed due to non co-operation of the petitioners and on account of the delay was caused by them. The documents to be inspected ran into about 45000 pages and therefore till complete verification was carried out properly, no action for recovery could have been taken. Mr. Naik submitted that the impugned order to the extent it failed to direct the respondent to deposit the amount of Rs.25,55,02,357/- in Court is bad in law, perverse and was liable to be set aside. Especially in view of the fact that various amounts had been paid to service providers by the petitioners such as Emerson Network Power India Ltd., Tata Communications Transformation *10* wp.5505of2015&1139of2017.odt Services Ltd., Maps Telecon (I) Pvt. Ltd., IL&FS Property Mgmt. Services Pvt. Ltd.
17. He submitted that these service providers had independent code numbers and had remitted their contributions to the Corporation directly and that several service providers had levied professional charges, licence fees, full maintenance contracts for equipment, survey charges etc. which did not qualify for the petitioner to make any contributions under the Act. He further submitted that contributions were sought in respect of M/s. Tata Communications Transformations Service Ltd. since all the employees of that company had salaries above the limit and were thus exempted. Furthermore, it was contended that professional charges have been paid to companies such as KPMG, Mastercom Technology Services, Mondial IT Consultants Pvt. Ltd., PCS Technology Ltd. to provide IT services which were not amenable to ESI contributions. On this basis Mr. Naik submitted that the impugned order is bad in law and deserves to be quashed and set aside. He further submitted that the relief sought in Exhibit 2 ought to have been granted and submitted that this Court should consider grant of the relief .
18. Mr. Naik submitted that the rejection of the request for re-verification of records was just, inasmuch as, the petitioner was not given sufficient time to produce voluminous records and the verification was a farcical exercise *11* wp.5505of2015&1139of2017.odt intended to create an impression that verification had been carried out to justify the respondents action in having recovered Rs.25 crores. He submitted that the records were voluminous which were scattered all over India in respect of "hundreds of contractors" and records in respect of various office establishments of the petitioners spread across the country. Mr. Naik further submitted that there was merit in the application for re-verification inasmuch as in the order dated 4th February, 2016 passed under Section 45A the respondent had determined amounts due at Rs.95,56,456/- as against the ad hoc claim of Rs.10,02,43,358/- claimed in the notice dated 5 th June, 2015 for the period August 2013 to May 2015. It is stated that the claim for Rs.25,55,02,357/- was baseless. Mr. Naik further submitted that after takeover of the business on transfer of shares in July 2008, the petitioners required the respondents to verify whether the company was covered under the Act. In July 2009 the respondent provisionally covered the petitioner with retrospective effect from 1st February, 2008 and assigned a Code. There were various demands made from time to time for the reasons set out in its challenge against the orders impugned in Writ petition no.5055 of 2015. Mr. Naik submitted that the re-verification was crucial and would have revealed that the petitioner had no liability. He submitted that the impugned order is bad in law and perverse denying the opportunity to the petitioner to establish his case.
19. Mr. Naik submitted that in its application for re-verification, an interim *12* wp.5505of2015&1139of2017.odt order had been passed on 21 st February, 2015 directing the ESI Inspectors to verify the records and and team of four inspectors and officials of the respondent had verified the records and submitted an inspection report in December 2014 but they had incorrectly computed liability at Rs.27,60,85,637/-. Furthermore, in the process of inspection, Mr. Naik submitted that the difference between salary register values and books of account was found to be Rs.137,47,93,239/-. Although the petitioner was desirous of filing a reconciliation statement, when the respondent was offered inspection, they declined to take inspection. The respondent Corporation then demanded Rs.8,93,61,561/- when in fact, nothing whatsoever was payable. Mr. Naik submitted that post inspection of the respondent had proceeded to finalize the liability in their report dated 28 th May, 2013 and considering the Salary Reconciliation Statement the liability would have been far lower, if at all. Mr. Naik therefore submitted that the re-verification was crucial to the petitioners and meanwhile the impugned order requires to be set aside. Mr. Naik submitted that the power of requiring discovery and production of documents is given to the Commissioner not to decide abstract questions of law but only to determine actual concrete differences in payment of contribution.
20. Mr. Naik relied upon the following judgments;
(a) Bharat Heavy Electricals Ltd. v/s. ESI Corporation 2008 II CLR 309
(b) Food Corporation of India v/s. The Provident Fund Commissioner & *13* wp.5505of2015&1139of2017.odt Ors. 1990 I CLR 20 S.C.
(c) Employees' State Insurance Corporation v/s. C.C. Santhakumar 2007 II LLJ 3
21. Mr. Mehta opposed the petition on the basis that verification had been carried out of the entire record provided by the petitioners and that the petitioners request for re-verification was baseless. He repeated the submissions pertaining to the Amnesty Scheme He submitted that there was no substance in the challenge and the records offered for inspection had been verified and the demands were made only thereafter. The Amnesty Scheme would have resolved the petitioners grievances. He submitted that re- verification would cast an unnecessary burden on the respondents for no fault of the respondents.
22. Mr. Mehta relied upon the affidavit of one Amita Kapadia, Social Security Officer, in which it was contended that the respondent had allotted a code to the company to cover their employees under Section 2(9) of the Act that the petitioner did not pay the contribution as a result of which the show cause notice dated 6th July, 2012 came to be issued for the period 1 st February, 2008 to 30th April, 2010. The petitioner failed to appear for a personal hearing and the said amount was found to be due and payable as set out in the order dated *14* wp.5505of2015&1139of2017.odt 29th October, 2012 passed under Section 45A of the Act. Another show cause notice came to be issued on 16th July, 2012 for non-payment of contribution in a sum of Rs.11,39,12,907/- for the period 1 st May, 2010 to 31st May, 2012, despite which the petitioner did not respond but contended that the notices have not been served upon the petitioner. The ostensible reason given is that the officer to whom it was addressed had left the services of the company. Thereafter recovery proceedings initiated vide Form C-19 which includes a claim for interest. Once again, the petitioner did not respond to the C-19 communications even for the subsequent period ending May 2012. A demand was made but was not complied with. Mr. Mehta therefore contended that a fair opportunity was granted to the petitioner yet they did not respond to the show cause notices, and therefore, the statutory interest has also been claimed.
23. Mr. Mehta submitted that at one stage the respondent had agreed to carry out the verification of the records of the petitioner to ascertain liability, however, verification was not facilitated although sufficient time was granted. The petitioners had not kept the records ready and only some records were provided. As a result, the petitioner was allowed to produce the records within 45 days and even after inspection to the extent granted, the petitioner was required to pay Rs.8,01,55,437/-. He submitted that in 2014 an Amnesty Scheme was announced w.e.f. 28 th January, 2014 upto 27th February, 2015 but the petitioner had failed to avail of the Scheme. It is further contended by Mr. *15* wp.5505of2015&1139of2017.odt Mehta that the Amnesty Scheme was widely publicized. It was made known to the public at large that the Scheme would be beneficial to all concerned. Yet, the petitioner did not enroll. The petitioner sought time to consider the same did not enroll and after expiry of the Scheme contended that it had taken a conscious decision not to avail of the Scheme.
24. Mr. Mehta contended that if the respondent had the entire record it could have been considered but they have not disclosed the entire record. Moreover, vide consent order dated 21 st March, 2013 sufficient time was given to produce records. Yet all the records were not made available. The respondent had offered all assistance and the petitioner had been extended all the opportunities. The petitioner contended that it had taken a conscious and cautious policy decision not to avail of the Amnesty Scheme. Mr. Mehta submitted that if the Amnesty Scheme had been availed of, it would not have shut out the petitioner's attempt at establishing that it had no liability. On the other hand, the petitioner would have had ample opportunity to demonstrate the absence of any liability. This not having been done, it is contended that the petitioner cannot now seek to prolong the matter inter alia by filing the present writ petitions. Mr. Mehta supported the impugned orders.
25. On behalf of respondent, Mr. Mehta relied upon the decision of Karnataka High Court in Employees' State Insurance Corporation, Bangalore *16* wp.5505of2015&1139of2017.odt v/s. New Forge Company, Bangalore 2010 III CLR 1031 in support of his contention that after receiving show cause notice employer had to appear before the authorities and demonstrate as to what was the actual wages paid and if on default, the employer does not produce records for assessment of contributions, the competent authority can use the 'best judgment' method and the Court would be justified in accepting the assessment. He relied upon paragraph 10 of the Karnataka High Court decision in this respect. Mr. Mehta therefore submitted that there is no substance in the challenge that the impugned order could not be faulted.
26. I have heard the learned counsel at length and with their assistance perused the applications and the orders passed thereon which are impugned in these petitions and I am of the view that no interference is called for. The order impugned in Writ Petition no.1139 of 2017 is passed on Exhibit 46 which contains a solitary prayer for re-verification of the "relevant record". The impugned order records that pursuant to the ad-interim order dated 21 st February, 2013, the record of the applicant had been verified by four inspectors, however, verification did not reveal anything substantial. The impugned order records that at the material time the applicant was ready to produce all records within 8 days and accordingly 8 days time has been granted. However, the inspection has been carried out for 45 days which establishes that the applicants had sufficient time to produce all relevant *17* wp.5505of2015&1139of2017.odt records. It is pursuant to the order passed under Section 45A that the petitioner had attempted to shift the burden on the respondent to verify records instead of establishing its case by oral and documentary evidence. Despite the verification conducted over 45 days, the petitioner could not establish that it had no liability and therefore the application was dismissed.
27. I find nothing wrong with the approach of the ESI Court. A party which initially sought eight days for offer records for verification had over forty five days to establish their case by producing relevant record. Yet, they seek re- verification. The application for re-verification is in my view vague and does not justify the respondent undertaking the exercise all over again. It is for the petitioners to prove their case in Application no.4 of 2013. The application for re-verification refers to the fact that the Reconciliation Statement could not be filed on 3rd May, 2013 but the same was offered on 6 th May, 2013. It is contended that delay in submitting the reconciliation statement itself could not result in additional liability being imposed upon the petitioners. Mr. Naik had contended that the Salary Reconciliation Statement was also not taken into account. It is further contended that for the period from 2007-08 and 2009, 100% invoice value paid to the contractors/ agencies had to be considered as wages but the liability had been computed without considering any overheads such as service tax, material cost and statutory liabilities. According to the petitioner, different criteria had been applied for different periods sans *18* wp.5505of2015&1139of2017.odt justification. It was stated that the records of the petitioner "scattered across"
the country and the applicant was not in a position to produce the record on the dates of inspection as a result of which the entire amount was considered as wages by the inspection team and the liability had been calculated on that basis. The petitioner had also taken up the contention that it could not produce the relevant documents on the inspection dates of 3 rd, 6th and 7th May, 2013 because these were subsequently collected and a request made to consider these was not accepted. In paragraph 21 of the application, it is contended that the petitioner had always been willing to pay amounts that are due from it and that re-verification would save precious time of the Court hearing the application. Save and accept these averments, the application is bereft of material particulars and does not merit consideration.
28. It is material to note that the petitioners were sought to be covered under the Act effective from February 2008. The process of disinvestment appears to have been initiated in the year 2002 or thereabouts. It is not possible to believe that the petitioners had not contemplated the prospect of being liable under the Act once they took over the business. In fact it is admitted by the petitioner that in July 2008 the petitioner inquired with the respondents whether it covered under the provisions of the Act. Thus it is not a case where the petitioners were taken by surprise. The petitioner was also not inexperienced. Indeed the petitioner does not claim naivety. With the *19* wp.5505of2015&1139of2017.odt resources at it command and while acquiring a large enterprise the petitioner would surely have contemplated the possibility of demands for contributors from the respondent. The petitioners would obviously have conducted an exhaustive due diligence exercise prior to embarking upon the acquisition of shares of the respondent. The said exercise will no doubt have revealed the prospect of petitioners being liable under the Act among others. Viewed from that perspective, the petitioners case that documents were scattered all of over cannot be a perennial problem. The petitioners sought eight days during which they offer inspection. Inspection was carried out for 45 days. If the petitioners could not produce the relevant records even across within 45 days it only shows lack of preparedness or reluctance in disclosing documents or unavailability of the relevant records. If the records were material, the petitioners would obviously have brought them to the notice of the respondent and not having been able to do so the petitioner cannot blame the respondent. The petitioners are responsible for managing their affairs and to establish their case and that they were not liable under the Act to the extent sought to be made liable under the show cause notices.
29. In Bharat Heavy Electricals Ltd. (supra) it was observed that it was necessary to determine the liability on the part of the contractors who may not be under control of the principal employer after the contracts come to an end *20* wp.5505of2015&1139of2017.odt and that the contractors were to be summoned to produce necessary records. In Food Corporation of India (supra) it was observed that the P.F. Commissioner had same powers as are vested in the Suit in proceedings under Section 7A. In C.C. Santhakumar (supra) wherein it is observed that the ESI Corporation could not claim contributions for a period of more than 5 years. These are aspects to be considered by the Court at the hearing of the Application no.4 of 2013 and in my view these decisions do not come to the assistance of the petitioners.
30. The main application no.4 of 2013 is still pending adjudication. More than 5 years have gone by after the application was filed and it was always open to the petitioners to view the appropriate records to establish the same at the hearing of the application by the time these petitions have been taken up for hearing. The petitioners will surely could have collected all the records. No particulars of these records have been disclosed to the respondents in the application which led to the impugned orders. The respondents cannot be faulted for the errors in judgment of the petitioner. It is open for the petitioner to establish their case before the Court. If the petitioners are confident of their case, it is always possible for them to establish the same in Court. They will be at liberty to file a written statement setting out the merits of the case. It would be unfair to burden the respondents with the task of re-verifying the entire *21* wp.5505of2015&1139of2017.odt record including those record which have already been inspected all over again. Indeed the respondents are not obliged to do so. In the circumstances, there appears no justification whatsoever in seeking further re-verification. In that view of the matter, it would be appropriate that the petitioners established their own case by presenting appropriate evidence which in any case will be subject to scrutiny of the respondents and to be dealt with in accordance with law. The impugned order cannot be faulted.
31. The orders impugned in Writ Petition no.5055 of 2015 also do not call for interference. The impugned order is common to Exhibit 2 and 15. The petitioners have themselves offered to pay the balance of Rs.20,94,89,280/-. At that stage, no attempt was made to seek appropriate relief. If the amounts were paid under protest, and if it is established during the hearing of Application no.4 of 2013 that recovery was not justified, it will be appropriate that the petitioners are compensated by an order for interest on such amounts that have been collected by the respondents to the extent of excess amounts collected at the material time. In my view, there is no justification in seeking deposit of the amount in this Court. At this stage, payments have been made under protest and will be subject to under consideration at the hearing of the application.
32. As far as Exhibit 15 is concerned, further proceedings pursuant to levy of damages have been stayed and the petitioners have been sufficiently protected.
*22* wp.5505of2015&1139of2017.odt The question remains in respect of the remaining show cause notice and whether protection is to be granted. In my view the petitioners would be entitled to urge their case and produce all relevant documentary evidence. The petitioners must dispel the impression created that they are attempting to hamper the respondents attempts payments to make recoveries. After all these are statutory liabilities which if found payable must be so paid.
33. In the circumstances, I see no reason to interfere with the impugned orders. However, in the interest of justice, the petitioner would be entitled to furnish particulars of the records relied upon by them as also their computation of liability juxtaposed with the demands made by the respondents. If such particulars are filed, the respondent will be at liberty to seek verification of the computation and if they so desire, seek inspection of the original records. Considering the fact that the petitioners had taken over the VSNL operations by acquisition of shares from the government, assuming that at stage there was no liability, in its written statement the petitioner will clearly categorize the employees in respect of which they are liable to make contribution as against others for whom they are not required to make contributions so as to prevent any confusion and in order to enable the respondents to properly appreciate the petitioners case. This will ensure that the petitioners are not prevented from bringing on record the purported reconciliation statement or such other records that would establish their professed lack of liability. This will also *23* wp.5505of2015&1139of2017.odt inure to the benefit of the respondent who will be able to gauge the merits of the petitioners case.
34. In the circumstances, I pass the following order:-
(a) The ESI Application no.4 of 2013 will be heard on dates to be scheduled without seeking unnecessary adjournments and shall be disposed off within a period of six months from today.
(b) The petitioners will be at liberty to file a written statement to the main application within a period of 30 days from the date of this order incorporating reconciliation statements, if any.
(c) In the event, respondent seek inspection of any original records, the petitioners shall facilitate such inspection within a reasonable time and in any case not exceeding 30 days from today.
(d) The respondents shall not take precipitative action for recovery pending final disposal of ESI Application no.4 of 2013 or for period of six months whichever is earlier.
(e) Both writ petitions are disposed with the above directions.
(f) The petitioner shall pay costs quantified at Rs.50,000/- to the respondents within a period of four weeks from today.
Digitally signed by (A. K. MENON, J.) Sandhya Sandhya Bhagu Bhagu Wadhwa Wadhwa Date:
2018.07.12 14:00:39 +0530